BUDGET 2017 COMMENT Association of Valuers, Property Managers, Estate Agents and Property Consultants in the Private Sector Malaysia

The Government has announced various measures to increase the supply and demand of houses and one of it is to enable public servants to own houses by increasing their housing loan eligibility from RM120,000 and RM600,000 to between RM200,000 to RM750,000. Also the Government will be completing 30,000 units of 1 Malaysia civil servants housing.
Another measure through the National Blue Ocean Strategy (NBOS), the Government will provide vacant lands at strategic locations to GLCs and PRIMA to build more than 30,000 houses from RM150,000 to RM300,000.
PEPS is of the view that in order to build the 500,000 affordable houses up to 2018 as proposed in the 2011 Budget, there must be ample supply of lands of reasonable prices for PR1MA and housing developers to build affordable housing. Hence this announcement in the 2017 Budget is the first step for the Government to provide land for affordable housing.
30,000 houses is not enough. PEPS advocate more collaboration between the Government and the housing developers for the release of more land, especially in urban areas, to build affordable housing.
Another measure announced in the 2017 Budget is to build 10,000 houses for rental to eligible youths. This will help urban youths who cannot afford to buy a house, hence, to rent first.
In fact, the Government should implement the scheme of renting the house with the option to buy after a few years.
The “step-up” end financing scheme as announced in the 2017 Budget for PRIMA buyers involving Bank Negara, EPF and 4 local banks assisting PRIMA buyers is deemed as a top-up loan and will assist PRIMA buyers to be eligible for the purchase and hence, it is a good measure.
The release of Government land in strategic locations to GLCs and PRIMA to build social housing is the first time the Government is providing land at its disposal for affordable housing. However, the Government land should be quickly identified and should be in urban areas in the Klang Valley and also all the major towns where affordable housing is needed the most.
PEPS understanding for the Government to release land to GLCs to build affordable housing would include GLC developers such as Sime Darby, MRCB and PNB controlled property developers.
In addition, the stamp duty exemption of 100% on instruments of transfer on housing loans will assist buyers. However, the increase of stamp duty on transfer of real estate valued at more than RM1 million being increased from 3% to 4% will increase the transaction cost of purchases.
For houses purchased between RM2 million to RM3 million, the increase of stamp duty will be from between 18.5% and 25%.
Generally, the 2017 Budget did not come up with any measures to revive the slow-down in the property market. We had expected that 2017 Budget to come up with the following measures:-
1.To re-introduce DIBS for first time buyers only and confine the purchase of the house up to RM400,000 and impose conditions of penalty if they sell the property within 5 years to prevent speculation.
2.To fast track the construction of affordable housing, PEPS strongly urge the Government to come up with relevant incentives for builders and developers to build prefabricated houses and implementation of Industrial Building System (IBS).
3.All the Government Departments/Agencies and GLCs to come out with a plan to identify their surplus lands for joint ventures with developers to build affordable housing. This will substantially bring down the land cost and assist in the monetisation of the Government land-bank assets.
4.EPF to allocate more funds under account 2 for first time buyers as a top-up loan for their deposits.
5.To provide incentives to developers who build affordable housing to rent.

On tourism, PEPS is of the view that to revive the economy, one good measure is to enhance the tourism sector. We applaud the Government for extending the Pioneer Status promotion and Investment Tax Allowance for new 4 and 5 star hotels extended to 31st December 2018 and also coming up with the visiting ASEAN@50 Year Campaign in 2017 and extending eVisa to countries in the Balkans and South Asia regions.